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Morning Take-Out

By William Alden May 29, 2012 7:55 amMay 29, 2012 7:55 am

Dewey & LeBoeuf Files for Bankruptcy | Dewey & LeBoeuf, the law firm crippled by financial miscues and partner defections, filed for bankruptcy on Monday night, punctuating the largest law firm collapse in United States history.

The filing, made in federal bankruptcy court in Manhattan, is the final chapter in a turbulent period for Dewey, which came apart after disappointing profits and prodigious debt forced it to slash partners’ salaries. The partners, already owed millions from previous years, grew concerned over the firm’s finances and their ability to get paid. A partner exodus destroyed the firm.

Dewey announced on Monday that the firm planned to liquidate. It said it would ask about 90 employees to remain on staff to assist in winding down its business. The firm has $315 million in liabilities, of which $225 million is owed to its banks, according to the court filings. Other creditors include the firm’s landlords and former partners owed money.

“This is a very sad day for the legal profession,” said Richard J. Holwell, a former federal judge in Manhattan now in private practice. “Dewey is a fabled firm with a lot of great lawyers, and a demise of this magnitude is unprecedented.” DealBook »

DEAL NOTES

Marina Keegan, Student Journalist Who Took on Wall St., Dies at 22 | Marina Keegan, a student journalist and playwright, was killed in a car accident near Dennis, Mass., on Saturday, only days after her graduation from Yale University. She was 22.

Ms. Keegan once wrote a guest column for DealBook, arguing that college students should try to resist the allure of a high-paying job in finance after graduation. Drawing on interviews with her peers, she tapped into a national debate on the financial services industry.

“Maybe I’m overly optimistic, but I think most young, ambitious people want to have a positive impact on the world. Whether it’s through art or activism or advances in science, almost every student I spoke to had some kind of larger, altruistic goal in life,” she wrote. DEALBOOK | YALE DAILY NEWS

As Euro Bond Wins Supporters, Details Remain Vague | Europeans are deeply divided over whether the euro zone countries should create common bonds to reduce borrowing costs for members that cannot get affordable credit on their own. But despite the intensity of the debate, the idea of a euro bond remains only the vaguest of concepts, Jack Ewing and Paul Geitner report in The New York Times. DealBook »

A Royal Wedding in Silicon Valley | Priscilla Chan, who married Mark Zuckerberg after Facebook’s public debut, eschews the Silicon Valley limelight. But people who know her say she is a “quiet yet forceful presence who is protective of her new husband, whom she met in line for the bathroom at a fraternity party in 2003,” The New York Times reports. NEW YORK TIMES

Marubeni of Japan to Buy Gavilon for $3.6 Billion | The Japanese trading house has agreed to buy the grain merchant Gavilon Group for $3.6 billion, as Marubeni looks to gain access to American agriculture markets. DealBook »

Microsoft’s Skype Deal Presents a Puzzle | Judging by the statistics, Microsoft’s $8.5 billion acquisition of Skype seems like a success. But the true test of the Internet calling service will be “whether Microsoft can weave the product deeply into its vast product portfolio, providing a superior Skype experience on products as various as Windows PCs and Xboxes,” The New York Times writes. NEW YORK TIMES

Barclays to Sell Unit to Deutsche Wohnen for $1.56 Billion | Barclays agreed to sell Baubecon, its German housing division, to the German real estate company Deutsche Wohnen in a deal worth roughly $1.56 billion, Bloomberg News reports. BLOOMBERG NEWS

Shareholder of Human Genome Challenges a Takeover Defense | A shareholder of Human Genome Sciences sued the board in an attempt to temporarily prevent the biotechnology company from using a so-called poison pill defense to ward off an offer from GlaxoSmithKline, Reuters reports. REUTERS

Vale of Brazil to Sell Assets for $407 Million | Vale, the Brazilian mining giant, said it had agreed to sell thermal coal assets in Colombia to a unit of Colombian Natural Resources, a company controlled by Goldman Sachs, for about $407 million, Reuters reports. REUTERS

Management Buyouts Can Be Too Cozy | A proposed $770 million buyout of the oil company Venoco illustrates how much influence a chief executive can have on a management-led deal, the Deal Professor writes. DealBook »

How a Hedge Fund Manager Harpooned the London Whale | Boaz Weinstein, the former Deutsche Bank trader who runs the hedge fund firm Saba Capital Management, played a central role in JPMorgan Chase’s multibillion-dollar trading loss, DealBook’s Azam Ahmed reports for The New York Times. He writes: “JPMorgan may have lighted the fire, but Mr. Weinstein and his cohorts fanned the flames.” NEW YORK TIMES

JPMorgan Sells Profitable Assets to Bolster Earnings | The bank sold roughly $25 billion of profitable securities in the aftermath of its trading debacle, helping to offset the loss by shifting gains from one part of the company to another, Reuters reports. REUTERS

Goldman Delays Launch of Trading Platform | A new bond trading platform from Goldman Sachs, called GSessions, was expected to go live in mid-May but encountered “logistical issues,” an unidentified person familiar with the platform told The Financial Times. FINANCIAL TIMES

Woes Deepen for Spain’s Banking Industry | As Spain’s borrowing costs approached record highs on Monday, analysts predicted the government would eventually seek emergency financing for its banks from the European Union, The New York Times reports. NEW YORK TIMES

European Companies Look Elsewhere for Loans | Companies in Europe have tapped the American leveraged-loan market for about $18 billion this year through Friday, more than double the total for all of last year, The Wall Street Journal reports, citing data from S&P Capital IQ. WALL STREET JOURNAL

Downgrade of Nordic Banks Prompts Muted Response | After Moody’s reduced its grades on some of the biggest Nordic banks, bond and equity prices actually rose, a sign that investors put less stock in the rating agency’s opinion than in their own judgment, Bloomberg News reports. BLOOMBERG NEWS

Citigroup Dismantles Group Overseeing Unwanted Assets | Citigroup has broken up a committee created in 2008 to oversee the disposal of toxic assets, Bloomberg News reports. The assets in that division have shrunk from $600 million during the financial crisis to roughly $200 million as of last month. BLOOMBERG NEWS

Moody’s Predicts Defaults in European Buyouts | A quarter of unrated European companies that underwent leveraged buyouts and have debt due by 2015 may default, Moody’s Investors Service said, according to Bloomberg News. BLOOMBERG NEWS

Payouts at Energy Future Holdings | The Texas power company Energy Future Holdings, which was the target of a huge buyout in 2007, is worth less than what its owners paid. Even so, the company is making cash payments to its private equity owners and paying retention bonuses to executives, The Dallas Morning News reports. DALLAS MORNING NEWS

Carlyle Shelves a Sale of Taiwan Bank Stake | A consortium led by the Carlyle Group halted a plan to sell a controlling stake in Ta Chong Bank of Taiwan, as offers from potential buyers did not meet expectations, unidentified people familiar with the situation told The Wall Street Journal. WALL STREET JOURNAL

Apollo’s Real Estate Head May Change Role | Joseph Azrack, who runs the real estate group at Apollo Global Management, is in talks with the private equity firm’s management about changing his job at the company, unidentified people familiar with the matter told The Wall Street Journal. WALL STREET JOURNAL

London Hedge Fund Chief Fined $4.7 Million | British financial regulators have issued a £3 million fine against Alberto Micalizzi, the chief executive of Dynamic Decisions Capital Management, the largest fine ever by British authorities in a case that did not involve market abuse. DealBook »

Icahn Discloses Stake in Chesapeake Energy | Carl C. Icahn reported on Friday that he held a 7.56 percent stake in Chesapeake Energy and called for a board shake-up. DealBook »

Star Traders Shine Less Brightly on Their Own | Traders who left banks for the world of hedge funds have often delivered disappointing results, Reuters writes. REUTERS

Canadian Official Looks to End Railway Strike | Canada’s labor minister introduced a bill on Monday that would end the strike by thousands of workers at the Canadian Pacific Railway, citing economic risks, The New York Times reports. The strike follows the successful proxy fight by the hedge fund manager William A. Ackman for control of the company. NEW YORK TIMES

Facebook’s Debut Stokes Fears of the Stock Market | Wall Street had hoped that Facebook’s debut might encourage ordinary investors to warm to stocks, as data show a broad retreat from the stock market. Instead, the troubled offering has renewed fears that the stock market may not be safe for everyone, The New York Times reports. NEW YORK TIMES

Facebook Dreams of a Smartphone | Facebook hopes to release its own smartphone by next year, in what would be its third attempt to build such a device, Nick Bilton reports for the Bits blog, citing unidentified employees of Facebook and several engineers who have been sought out by recruiters there, as well as people briefed on Facebook’s plans. NEW YORK TIMES BITS

A Facebook Director Has Irons in Many Fires | James W. Breyer, a partner at the venture capital firm Accel Partners, sits on the boards of several public companies that are experiencing major problems, Gretchen Morgenson writes in her column in The New York Times. NEW YORK TIMES

Was Facebook’s Offering a Disaster? | Joe Nocera writes in his column in The New York Times that “we’ve all become brainwashed into believing that, when it comes to I.P.O.’s, up is down and down is up. A successful I.P.O. is one where the company gets hosed by Wall Street. A failed I.P.O. is one where the company’s interests, not those of Wall Street speculators, are served.” NEW YORK TIMES

The Limits of Facebook | Ross Douthat writes in his column in The New York Times that the problem with Facebook is that “it doesn’t make that much money, and doesn’t have an obvious way to make that much more of it, because (like so many online concerns) it hasn’t figured out how to effectively monetize its million upon millions of users.” NEW YORK TIMES

In Cambodia, a Start-Up Combines Web Sales Skills and Hair Extensions | An e-commerce site that sells hair extensions has overcome challenges like spotty electrical service to gain some market share. DealBook »

New York as a Magnet for Start-Ups | The New York Times reports: “The recent burgeoning of New York’s Internet industry has forced some entrepreneurs — who, just a few years ago, might have felt they had little choice but to head west to pursue their dreams — to make a difficult choice. New York is now enough of an attractive alternative that a few West Coast-born start-ups are even packing up and moving east.” NEW YORK TIMES

Silicon Valley Migrates North | San Francisco is gaining more of a tech scene, as Twitter and the venture capital firm Benchmark Capital become the latest Silicon Valley players to set up offices there, Bloomberg News writes. BLOOMBERG NEWS

An Alternative to South by Southwest | The organizers of the XOXO festival, a four-day conference scheduled for mid-September in Portland, Ore., raised money for the event through Kickstarter, the Bits blog reports. NEW YORK TIMES BITS

Madoff Case Is Paying Off for Trustee ($850 an Hour) | A look at recent court filings shows that Irving H. Picard has had much more success collecting money for himself and a dozen law firms and consultants than any victim of the Madoff Ponzi scheme, Andrew Ross Sorkin writes in the DealBook column. DealBook »

Regulators Under Scrutiny After JPMorgan Loss | None of the federal regulators stationed inside JPMorgan Chase were assigned to the office that oversaw the bank’s huge trading loss, and bank executives dismissed concerns about the unit’s increasing risk, The New York Times reports, citing current and former regulators who spoke only on condition of anonymity. The lapses have raised questions about whether regulators were sufficiently independent, The Times reports. NEW YORK TIMES

Dimon Agrees to Testify, Without Committing to Specific Date | While Jamie Dimon, the chief executive of JPMorgan Chase, has agreed to testify before a Congressional committee in June to discuss the bank’s recent multibillion-dollar trading loss, he has not committed to a date. DealBook »

Japanese Insider Trading Investigation Touches JPMorgan | Japanese regulators identified JPMorgan Chase as the source of a leak of confidential information about a 2010 I.P.O., Reuters reports. REUTERS

Prosecutors Present E-Mail Evidence in Insider Trading Case | Testimony on Friday during the trial of Rajat K. Gupta included the presentation of an e-mail from Mr. Gupta to his fellow Goldman Sachs director, Bill George, pitching him on a fund. DealBook »

A Plea for Banking Simplicity | Joe Nocera writes in his column in The New York Times that the Dodd-Frank Act, which is approaching its two-year birthday, “accepts the complexity of modern banking — and then adds to that complexity with its thousands of pages of regulations. That complexity is something to worry about.” NEW YORK TIMES

Former Olympus Chief Said to Seek $60 Million | Michael C. Woodford, the former chief executive of Olympus, plans to sue the troubled camera maker over his dismissal, seeking damages amounting to 10 years of earnings, Bloomberg News reports, citing an unidentified person familiar with the claim. BLOOMBERG NEWS